Wednesday, March 16, 2016

More On The Islamic State’s Participation In Iraq’s Dollar Exchanges

It’s been reported several times that the Islamic State is
taking part in Iraq’s dollar exchanges to earn hard currency. At the end of
2014 the U.S. Federal Reserve and Treasury Department warned
the Central Bank of Iraq (CBI) that IS was buying up dollars at its auctions.
The U.S. even stopped delivering dollars to Iraq in the summer of 2015 to push
the Bank towards reform. In response the CBI issued
new rules, fined banks, and banned 142 money exchanges from the auctions. Iraq
has weak enforcement however, so the Bank’s actions have not stopped IS from
being able to buy dollars.

In March 2016 David Butter of Chatham House testified
to the British parliament on IS’s continued role in the Central Bank’s
exchanges He said IS was taking dinars from Mosul, sending them to Jordanian
banks, then to Ramadi, and onto Baghdad using money transfers. They then used
the dinars to buy U.S. dollars from the Central Bank and sell them for a
profit, which was then sent back to IS areas. Butter claimed that IS was making
$20-$25 million a month from the dollar auctions. Ramadi has been retaken by
the government, but IS probably has other routes to Baghdad that it can use. What
Butter pointed out was that the group was still making lots of money off of the
Central Bank. It has not proven able to stop IS because the ruling parties,
Iran, Syria, and organized crime rings are all making money off of the dollar
auctions as well. The Bank would have to crackdown on upon all of those to get
to IS. The CBI is unwilling to do so, because it can’t stand up to such
powerful actors. That means IS will continue to have this source of funding as
other means such as its oil industry began to dry up in the face of
international bombing.

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About Me

Musings On Iraq was started in 2008 to explain the politics, economics, security, culture and history of Iraq via original articles and interviews. If you wish to contact me personally my email is: motown67@aol.com